PUBLIC PROCUREMENT

RULES - 2004

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 CONTENTS / SUBJECTS OF
PPRA’s RULES 2004
1. Notification
2. General Provisions
3. Procurement Planning
4. Procurement Advertisement
5. Prequalification, Qualification and
Disqualification of suppliers
6. Methods of Procurement
7. Opening, Evaluation and Rejection of Bids
8. Acceptance of Bids and Award of Procurement
Contracts
9. Maintenance of Record and Freedom of
Information
10. Redressal of Grievances and Settlement of
Dispute
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 NOTIFICATION
Rule.1
Short title and commencement
In exercise of the powers conferred by section 26 of the
Public Procurement Regularity Authority Ordinance,
2002, the Federal Government made the following rules:

“Public Procurement Rules-2004”

S.R.O.432(1)/[Link] Division ,8th June,2004

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 General Provisions
Rule.2
Definitions

a. Bid g. Emergency
b. Bidder h. Lowest Evaluated Bid
c. Competitive bidding i. Ordinance
[Link] j. Repeat Order
[Link] k. Supplier
[Link] and Fraudulent l. Value for Money
Practices

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 Rule. 3
Scope and Applicability

These rules shall apply to all procurements made

by all procuring agencies of the Federal
Government whether within or outside Pakistan

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 Rule. 4
Principles of Procurement

Procuring Agencies, while engaging in procurements, to

ensure that
•the procurements are conducted in a fair and
transparent manner

•the object of procurement brings value for money to

the agency

•the procurement process is efficient and economical.

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 Rule. 5
International and Inter-
governmental Commitments

Whenever these rules are in conflict with an obligation

or commitment of Federal Government arising out of
•an international treaty or
•an agreement with state or states or any international
financial institution
 the provision of such international treaty or agreement
shall prevail to the extent of such conflict
S.R.O 719(I)/2011, Public Procurement Regulations, 2011
Regulation-3. For invoking Rule-5 bring a case to the ECC, the ECC
shall consider such case and authorize or otherwise
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 Rule. 6
Language
 All communication and documentation in Urdu or
English or Both.
 Outside Pakistan and local procurement in local
language in addition to Urdu or English
 When local language is used then Original
documentation in Urdu or English for record;
 Their translation in local language to be used;

Provided that use of local language ensure maximum

economy and efficiency is ensured.
 In case of dispute original documentation shall be
referred.
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 Rule. 7
Integrity Pact

Procurements exceeding the prescribed limit subject to an

integrity pact, between the procuring agency and the
suppliers or contractors

 Decision of ECC dated 23rd Sep, 2002 – Declaration of

Fees, Commissions and Brokerage

 Finance Division’s DO No. 687/MD(PPRA)/05 dated

14th Sep, 2005 – Integrity Pact to be made a part of all
contracts worth Rs. 10 Million and above in value.

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 Procurement Planning
Rule. 8
Procurement Planning

All procuring agencies to devise a mechanism,

for planning in detail for all proposed
procurements with the object of realistically
determining the requirements of the procuring
agency, within its available resources, delivery
time or completion date and benefits that are likely
to accrue to the procuring agency in future.

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 Rule. 9
Limitation on splitting or
regrouping of proposed
Procurement
 A procuring agency to announce in an appropriate
manner all proposed procurements for each financial
year subject to provision;

 To proceed accordingly without any splitting

or regrouping of procurement so planned; and

 To advertise in advance on the Authority’s

website and its own website.

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 Rule. 10
Specifications

• Shall be generic and allow widest possible

competition
• Shall not favour any single contractor or supplier
• No reference to brand, model number etc
•If necessary to include brand – shall be qualified with
word “ or equivalent”
•Rule not apply to procurement made by Public Sector
commercial concerns to made procurement on demand
of private sector client

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 Rule. 11
Approval Mechanism

All procuring agencies to provide clear authorization

and delegation of powers for different categories of
procurement and to only initiate procurement once
approval of the competent authorities obtained.

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 Procurement Advertisement
Rule. 12
Methods of Advertisement
• More than Rs. 100,000 and upto 2.0 million
 Authority’s website
 PA’s own website (if exist)
 May also be advertised in print media, if
deemed necessary by PA
• Over Rs. 2.0 million
 Authority’s website
 PA’s own website (if exist)
 Must be advertised in print media – Min 2
national dailies (1 English & 1 Urdu) having
wide circulation
SRO 1094, Public Procurement (specimen for advertisement) Regulation 2015.
For advertisement, Standard Format of PPRA must be followed 14
 Rule. 13
Response Time
• PA may decide the response time for receipt of bids or
proposals based on complexity, availability and urgency
• Under no circumstances response time shall be less than
 15 days for national bidding
 30 days for international bidding
• Response time shall be calculated from the date of first
publication of advertisement in newspaper or posting on
website, as the case may be
• No time limit in case of emergency
• Where publication of advertisements has occurred in both
electronic and print media, the response time to be
calculated from the day of its first publication in the
newspapers.
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 Rule. 14
Exceptions
Mandatory for procuring agencies to advertise all
procurement requirements exceeding prescribed financial
limit under Rule 42 (b) (i) {Rs.100,000 or Rs.500,000 for
Boards of Autonomous Bodies},
However following exception with prior approval of
Authority
If the procurement relates to national security and its
publication could jeopardize national security objectives;
and

If the publication of procurement in any manner, relates

to disclosure of information, which is proprietary in nature
or falls within the definition of intellectual property which is
available from a single source.

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 Prequalification, Qualification & Disqualification of
Suppliers and Contractors

Rule. 15
Pre-Qualification of
Suppliers / Contractors
PA, prior to floating of tenders, may engage in pre-
qualification of bidders in case of services, civil
works, turnkey projects and procurement of
expansive and technically complex equipments.

Ensure that technically and financially capable firms

having adequate managerial competency are invited.
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 Rule. 16
Pre-Qualification Process

 The PA shall announce in PQ Documents all information

required for pre-qualification including:
• instructions for preparation & submission of PQ
documents
• evaluation criteria
• list of documents required
• any other information deem necessary
 The PA shall provide a set of PQ Documents to Contractors
on request and subject to payment of price.
 Price of Pre-qualification documents not to exceed the cost
of printing and providing the documents
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 Rule. 17
Qualification of Suppliers & Contractors

 PA, at any stage of procurement proceedings,

having credible reasons / evidence of any
defect in supplier’s or contractor's capacities,
may require to provide information
concerning technical, financial, legal matters –
whether already pre-qualified or not

 Proviso: Reasons to be recorded in writing by

the PA

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 Rule. 18
Disqualification of Suppliers & Contractors

The PA shall disqualify a supplier or contractor if it

finds, at any time, that the information submitted
by him concerning his qualification as supplier or
contractor was false and materially inaccurate or
incomplete.

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 Rule. 19
Blacklisting

 PA shall specify a mechanism and manner to

permanently or temporarily bar due to
consistently poor performance or fraudulent
practice
 such barring action shall be duly publicized
and communicated to the Authority
 provided contractor / supplier accorded
adequate opportunity of being heard
Pakistan Railways’ Policy
Ministry of Railways Policy Circular number 39-1/96-P&S dated 20.05.2013
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 Methods of Procurement
Rule. 20
Principal Method of Procurement

Save as otherwise provided hereinafter, the

procuring agencies shall use open competitive
bidding as the principal method of procurement
for the procurement of goods, services and works.

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 Rule. 21
Open Competitive Bidding

Subject to the provisions of rules 22 to 37 the

procuring agencies shall engage in open
competitive bidding if the cost of the object
to be procured is more than Rs.100,000.

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 Rule. 22
Submission of Bids

(1) The bids shall be submitted in a sealed

package or packages in such manner that the
contents are fully enclosed and cannot be known
until duly opened.

(2) A procuring agency shall specify the manner

and method of submission and receipt of bids in
an unambiguous and clear manner in the bidding
documents.

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 Rule. 23
Bidding Documents

 (1) PA shall formulate precise & unambiguous

bidding documents that shall be made available to
bidders immediately after the publication of the
Invitation to Bid

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 Rule. 24
Reservations and Preferences

(1) Allow all bidders without regard to

nationality
Exception only in accordance with the policy of the
Federal Government

(2) PAs shall allow Price preference to domestic

or national bidders as per policy of the Federal
Government
Magnitude of price preference shall be clearly
mentioned in bid evaluation criteria
S.R.O.827(I)/2001, Import of Engineering Goods (control) Order, 2001
Only Order No.3 which relates to Price Preference is applicable. Whereas,
Order No 4 to 6 are not be followed
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 Rule. 25
Bid Security

The procuring agency may require the

bidders to furnish a Bid Security not
exceeding five per cent of the bid price.

Bid Security by PEC ST-TE bidding procedure 27

 Rule. 26
Bid Validity

(1) PA, keeping in view the nature of the procurement,

shall specify the bid validity period
(2) Bids shall be valid for the period specified in the
bidding documents
(3) PA shall ordinarily be under obligation to complete the
bid evaluation process within stipulated bid validity
period. However, under exceptional circumstances and
for reasons to be recorded in writing, if an extension is
considered necessary, all those who have submitted
bids shall be asked to extend validity
Extension of validity period shall be for not more than
the period equal to the original bid validity 28
 Rule. 27
Extension of Time for Submission of Bids

 PA can extend deadline for submission of Bids

 Reasons for Extension of Time to be recorded
 It should be done in an equal opportunity
manner
 Advertisement of Extension (corrigendum)
should be similar to original advertisement

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 Opening, Evaluation & Rejection of Bids
Rule. 28
Opening of Bids

(1) - The date of opening of bids and last date of

submission of bids shall be the same.

- The bids shall be opened at the time specified

in the Bid Doc which should be at-least 30
minutes after the deadline for submission
of bids

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 Rule. 29
Evaluation Criteria

 PAs shall formulate an appropriate evaluation

criterion listing all the relevant information
against which a bid is to be evaluated

 Such evaluation criteria shall form an integral

part of the bidding documents

 Failure to provide for an unambiguous

evaluation criteria in the bidding documents
shall amount to mis-procurement
SRO 1093(I)/2015. Bidder must be Active Tax Payer
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 Rule. 30
Evaluation of Bids

(1) - All bids shall be evaluated in accordance with

the evaluation criteria and other terms and
conditions set forth in the prescribed bidding
documents.

- Save as provided for in Rule 36(c)(iv) no

evaluation criteria shall be used for evaluation of
bids that had not been specified in the bidding
documents.
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 Rule. 31
Clarification of Bids

(1) - No bidder shall be allowed to alter or modify

his bid after the bids have been opened.
- All The PA may seek and accept clarifications
to the bid that do not change the substance of
the bid
(2) - Any request for clarification in the bid, made
by the procuring agency shall invariably be in
writing.
- The response to such request shall also be in
writing.

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 Rule. 32
Discriminatory and Difficult Conditions
 No procuring agency shall introduce any condition,
which discriminates between bidders or that is
considered to be met with difficulty.
 In ascertaining the discriminatory or difficult nature of
any condition reference shall be made to the ordinary
practices of that trade, manufacturing, construction
business or service to which that particular
procurement is related.

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 Rule. 33
Rejection of Bids

(1) - The PA may reject all bids or proposals at any

time prior to the acceptance of a bid or
proposal.
- The PA shall upon request, communicate to
any supplier or contractor who submitted a bid or
proposal, the grounds for its rejection of all
bids or proposals, but is not required to justify
those grounds.
(2) - The PA shall incur no liability
(3) - Notice of the rejection of all bids or proposals
shall be given promptly to all bidders.

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 Rule. 34
Re- bidding

(1) - If the PA has rejected all bids under rule 33 it

may call for a re-bidding.

(2) - The PA before invitation for re-bidding shall

assess the reasons for rejection and may revise
specifications, evaluation criteria or any other
condition for bidders as it may deem necessary.

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 Rule. 35
Announcement of Evaluation Reports

Procuring agencies shall announce the results of bid

evaluation in the form of a report giving justification
for acceptance or rejection of bids at least ten days
prior to the award of procurement contract.

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 Rule. 36
Procedure of Open Competitive Bidding
Permissible procedures for open competitive bidding

a. Single stage – one envelope

b. Single stage – two envelope

c. Two stage bidding

d. Two stage – two envelope

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 Rule. 37
Conditions for adopting type of Bidding Procedure

i. Single stage - one envelope bidding procedure shall

ordinarily be the main open competitive bidding
procedure used for most of the procurement.

ii. Single stage - two envelope bidding procedure shall

be used where the bids are to be evaluated on
technical and financial grounds and price is taken into
account after technical evaluation;

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Acceptance of Bids and Award of Contract
Rule. 38
Acceptance of Bids

 lowest evaluated bid to be accepted

 If not in conflict with any other law, rules,
regulations or policy of Government.
 Within the original or extended period of bid
validity

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 Rule. 39
Performance Guarantee

 If required , to be furnished by the

successful bidder
 shall not exceed 10% of the contract
amount
 should be clearly expressed in the
bidding documents.

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 Rule. 40
Limitation on Negotiation

 No negotiations with the bidder having

submitted the lowest evaluated bid or with any
other bidder.
 Exception – extent of negotiation
permissible shall be subject to the
regulations issued by PPRA.

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 Rule. 41
Confidentiality

 All information regarding the bid

evaluation shall be kept confidential until
the announcement of evaluation report
(Rule - 35)

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 Rule. 43
On Account Payments

 Prompt Payments to suppliers/contractors within

the time given in the conditions of the contract,
which shall not exceed 30 days

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 Rule. 44
Entry into force of the Contrcat
 A Contract shall come into force-
(a) If no formal signing of contract is
required:-
 From the date of the notice of the acceptance
of the bid, Or
 From the date of the purchase order
(b) If formal signing of a written contract
is required:-
 From the date of signing the contract by all
parties concerned, Or
 From the date of fulfillment of certain
condition(s) – Contingent Contracts.
SRO 1170(1)/2009 , Public Procurement Regulation 2009.
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PAs to post Contract Award over 50 million on PPRA website
 Rule. 45
Closing of Contract

(1) on issuance of overall delivery certificate or taking

over certificate
 Required to be issued within 30 days of final
taking over of goods/receiving the deliverables or
completion of work.
(2) On expiry of defect liability or maintenance period
(certificate shall be issued within 30 days)
 In case of unsettled claims – arbitration required
(bill shall be paid within 60 days).

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 Maintenance of Record and Freedom of Information

Rule. 46
Record of Procuring Procedures

(1) To be maintained by all [Link] for a minimum

period of 05 years

(2) Maintenance of record subject to regulations

issued from time to time

For detail refer to Public Procurement Regulations-2008

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 Rule. 47
Public Access and Transparency

 as soon as the contract is awarded the PA shall

make all documents public
 exceptions – proprietary nature or against the
Public Interest
 Prior approval of PPRA required to withhold the
information from public disclosure

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 Redressal of Grievence and Settlement of Dispute
Rule. 48
Redressal of Grievances by the Procuring Agency
(1) Constitution of an odd number Committee by PA
to address complaints may occur prior to the
entry into force of the procuring contract
(2) Written complaint within 15 days after the
announcement of the bid evaluation report
(3) Decision by the Committee within 15 days of the
receipt of the complaint
(4) Lodging of complaint does not warrant suspension
of procurement process
(5) Bidder not satisfied with decision can file appeal
in the relevant court of jurisdiction
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 Rule. 49
Arbitration

(1) after coming into force of the procuring

contracts dispute shall be settled by
arbitration

(2) PA to provide a method of arbitration in

the contract

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 Rule. 50
Mis-procurement

Any Un-authorized breach of these rules shall amount

to Mis- Procurement
Rule. 51
Overriding Effect

The provisions of these rules shall have effect

notwithstanding anything to the contrary contained
in any other rules concerning public procurements.

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THANKS……….